SARWOTHAM ISPAT LTD Vs. GOVERNMENT OF INDIA

JUDGEMENT

(1.) In these two writ petitions, the petitioners have prayed for issuance of a Writ of Mandamus declaring Rule 97 ZO 3 of Notification No. 27/97, Central Excise (N.T.), dated 25-7-1997 as illegal, arbitrary, unjust, void and violative of Articles 14,19(1 )(g) and 21 of the Constitution of India.The petitioners have also prayed for a direction to the respondents 1 to 3 to levy excise duty on the petitioners by giving credit to the power cut imposed on them by the third respondent and pass such other order as is deemed fit and proper in the circumstances of the case.

(2.) The contextual facts depict that the petitioners are induction furnaces units engaged in the manufacture of Mild Steel ingots which is otherwise an excisable commodity .The manufacturing process of the petitioners involve melting of mild steel scrap in the furnace by heating with the help of electricity. It is a continuous process and in a day about 10 heats would be required for the purpose of having the furnances work to its optimum level.

(3.) The petitions record that the petitioners have been paying excise duty on the mild steel ingots on the basis of the actual production. It has been the grievance of the petitioners that recently the Central Government has changed its policy with regard to excise duty and issued a notification under Section 3-A of the Central Excise Act, 1944 which empowers the Central Government to levy excise duty on such goods as may be notified on the basis of the annual capacity of the production of the factory concerned. It is the petitioners' definite case that by reason of the power cut as introduced in the State, the petitioners' optimum level of production is not being reached and as such, the petitioners have not been able to make use of the full capacity of the furnaces. Consequently, 100% production level also cannot be reached since power is chief raw material and has a major impact on the production of mild steel ingots.